Interesting Investment Quote
July 7, 2008 – 6:10 amI ran across this comment in an article I was reading on Asset Location:
“Even though our purpose was not to enter the debate between actively-managed and passively managed equity funds, our simulations do shed light on the relative advantage of the two fund types for someone saving consistently over 37 years. Our bootstrap simulations indicate that a risk averse retirement accumulator would historically have fared better with an index fund, and an asset location strategy that held this fund in a taxable setting, than with a randomly chosen actively managed fund, held in the tax-deferred account.”
Surprise surprise. These financial researches observed the benefits of indexing, and they weren’t even trying to prove that point!
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